Can an independent country share a currency? The Elgin Marbles depict the mythology of ancient Greece. The modern myth is that sovereign Nations can be bound together by a single currency. Greece must avoid replacing one myth with another- that returning to the drachma will be a panacea. If and when the drachma returns it will not be the notes and coins issued by the State free of debt which will be the problem, it will be the new drachma denominated debt issued by the privately controlled international banking system which will hobble Greece to its present masters.
It is not just the EU which is Greece’s nemesis. It is the IMF, the WTO, the TTIP, the rating agencies, the faceless financial markets, indeed the entire house of cards which now dominates our Western democracies and dictates the neo-liberal economic dogma which divide societies and rationalises self-destructive austerity.
These are the global institutions which will dictate the nature and values of Greece’s future economy – not its government and not its people.
Whether we use pounds, euros, dollars or pesos all official money has a shadow currency – the credit issued by these private banks. Yes, the State accepts all the responsibility for its National Currency and indeed its taxpayers also guarantee every penny of the shadowy debt issued by their privately owned banks, but they have no control whatsoever over this debt money which constitutes over 95% of all money in circulation and forms the core of our artificial National Debts.
Greece, and indeed any other sovereign State can recover its independence but only if it retains its currency within its own borders. That way no unauthorised parties can manipulate its value or speculate against it.
That also provides a constant reality check because it obliges a balance of trade, keeps international moneylenders at bay and returns the currency to democratic accountability. The social dividend from this may take a few difficult years to deliver but the destiny of the Greeks, rich and poor alike, will at least be back in their own hands.
Such matters have nothing to do with socialism, capitalism or the redistribution of wealth, they are to do with moneylenders and a fraud upon the people. As for the outstanding euro creditors – they should ask their governments to authorise the debt to be written off their balance sheets. For the most part that can be done with little pain and as readily as it was written into their overstuffed balance sheets in the first place. That may disturb the illusion which is fractional reserve banking, but that would be just another myth displaced by reality.
A Grexit on this basis would start a chain reaction – not just affecting the euro but all currencies. This because it would demonstrate that Sovereign Debt (debt denominated in a foreign currency) and National Debt (in one’s own currency) can be written off both sides of banks’ balance sheets without the world coming to an end. That in turn would expose the entire house of cards which is fractional reserve and also the madness of government bonds bought with bank credit. The magnificent Ponzi scheme might then be immortalised in another marble frieze more significant than any relic from the Parthenon.
If the Greeks summon up all their courage for this Referendum and back their new government to stand its ground and default, they must also find the nerve to legislate for Constitutional money and outlaw fractional reserve banking within their borders. There is no half-way house, The people have a unique opportunity to decide whether their country is to be run by bankers or an elected parliament.
To this end the new Greek government must also widen its circle of financial advisors. If they go to the established fonts of wisdom they will be speaking to the very people who created or endorsed the present arrangements which have so signally failed. They must seek other ‘experts’ who dare to think outside the box and perhaps even more importantly they must ensure the people they govern are fully informed that money and banking can only work for everyone when everyone understands what is going on.
A few years ago I wrote an essay on this very subject as an entry for the Wolfson Prize in Economics which offered the winner £250,000 for the best proposal to resolve the Greek euro problem. My effort included all the technical detail contained in my book advocating an independent currency for a sovereign Scotland. Alas, my efforts were assessed by professional economists who clearly considered it an eccentricity. The winning entry observed all the usual academic conventions and revealed nothing new nor anything of value to anyone other than the author. I was reminded of the prestigious Council of Economic Advisors who persuaded the SNP that sharing sterling would be a good idea for an independent Scotland …
Of course all this is heresy to the Establishment and will be resisted by all the considerable means at their disposal. Unfortunately neither politics nor economics is a science and so myth, whether from the ECB, the Federal Reserve or the Bank of England, will continue to suppress reason.
Still, what irony if the country where the word Democracy was born also conceived its rebirth.